Silver markets have pulled back a bit during the trading week to reach down towards the $26 level. However, we have seen a lot of buying during the week to send silver back towards the $28 level. If we can break above the $30 level, then the market is likely to go screaming to the upside. We have seen silver markets break above the $30 level couple of times in the past, which typically will open up a move towards the $50 level. This will be especially true as we continue to see people betting on the “reflation trade”, as stimulus should drive up demand for industrial metal such as silver.
Furthermore, the US dollar losing strength will course cause commodities to rally in a bit of a self-fulfilling prophecy. I think at this point, any time this market pulls back it is likely to offer plenty of buying opportunities, all the way down to at least the $24 level. The silver market of course has very tight supply, and that is a major problem as well.
As demand picks up due to industry waking back up, it is very likely that silver will follow other metals such as copper and iron to go higher, but that does not necessarily mean that we are going to get there overnight. I think that this continues to be a very choppy marketplace, so you should be looking for value any time it appears. Dips should be thought of as buying opportunities going forward.